Novant Health Reports 2014 Audited Financial Results
Health system reports net income of $201.8 million and community benefit of $639.2 million
Winston-Salem, NC, April 1, 2015 - Novant Health today announced the 2014 audited financial results for the not-for-profit healthcare system. For 2014, the system reported a net income of $201.8 million on operating revenue of $3.8 billion. The system also reported a community benefit of $639.2 million, including $135 million of direct charity care.
Fiscal year 2014 net income, also referred as excess revenue over expenses, is comprised of $166.9 million of operating income and investment gain of $38.9 million.
Carl S. Armato, president and CEO of Novant Health, commented that the organization responsibly managed its expenses in 2014 to ensure a financially healthy position in this continued turbulent healthcare environment.
"As with the past several years, Novant Health managed itself with a strong sense of financial responsibility as we prepare for continued changes in the healthcare industry," Armato said. "Strong financial results are necessary for us to reinvest in our communities, facilities and team members. I am proud of our organization's efforts to transform, lower costs and find efficiencies in our operations."
Focused on community benefit, charity care and economic impact
Novant Health provided more than $639 million of community benefit, including over $135 million in charity (free) care to uninsured and indigent patients in 2014. As a not-for-profit healthcare system, the organization is committed to fulfilling its mission to improve the health of the communities it serves, regardless of a patient's ability to pay.
Charity care for indigent patients ranged from providing flu shots to comprehensive cancer treatments.
Bad debt, which is not included in community benefit reporting, was slightly higher than 2013 at $190 million.
Novant Health boosts the North Carolina economy by nearly $6 billion, according to a 2013 economic impact study. The organization supports more than 44,000 jobs and $2.4 billion in salaries, wages and benefits in the state and generates $623 million in tax revenues, according to the study.
Key investment milestones reached in 2014
In addition to community benefit and charity care, as a not-for-profit system, the organization reinvests operating
and investment income into new technology, hospital improvements, equipment and community health needs.
In 2014, Novant Health converted seven medical centers to electronic health records, including Novant Health Charlotte Orthopedic Hospital, Novant Health Huntersville Medical Center, Novant Health Matthews Medical Center, Novant Health Forsyth Medical Center, Novant Health Kernersville Medical Center, Novant Health Medical Park Hospital and Novant Health Clemmons Medical Center. The project is part of the $600 million investment the organization expects to make implementing electronic health records across all facilities.
In all, the organization invested more than $266 million in capital for construction projects, routine equipment replacements at facilities and the implementation of electronic health records. A significant expenditure was made to finalize construction of Novant Health Haymarket Medical Center in Northern Virginia, which opened in 2014.
Fred Hargett, chief financial officer for Novant Health, commented that healthy financial results fund planned investments as well as those needed to react to the needs of communities across the organization’s four-state footprint.
"Our patients rely on our investments every time they put their trust in us for care,” Hargett said. "We have a responsibility to our communities to ensure we provide them with the very best care available and, in 2014, a significant investment was made to update equipment, implement electronic health records and open access to care in Northern Virginia.”
Focus on quality, safety and expanding access
Novant Health facilities participate in state and national quality public reporting programs and consistently rank as national leaders.
"We are proud of our commitment to quality care," Armato said. "While affordability continues to be a focus for Novant Health, paramount to our commitment to our patients is a quality outcome. We continue to put quality and safety at the forefront of all we do.”
Novant Health also focused on expanding access to affordable care for patients by expanding hours at primary care clinics, opening Novant Health Express clinics, offering video and e-visits and encouraging use of MyChart, the online patient portal synced with electronic health records.
At the end of 2014, Novant Health had 411,000 registered MyChart users and led the country among Epic electronic health record providers for utilization. More than 100,000 Novant Health patients log in to MyChart each month to access their electronic health records versus the national average of approximately 25,000 monthly users. Through the portal, patients can schedule appointments, view test results and communicate with their physicians
via a secure email.
Healthcare reform continues
Following the first open enrollment period for the Health Insurance Marketplace, Novant Health saw a slight decline
in self-pay patients in 2014. Patient volumes remained flat to neutral year-over-year and, as patients see more out-of-pocket costs with rising deductibles, elective procedures continue to be thoughtfully considered by patients before taking place.
In 2014, Novant Health also advanced its population health management strategy. Novant Health’s new patient-oriented delivery system (PODs) launched in March 2014 with an integrated, multidisciplinary care coordination team dedicated to the holistic needs of individuals in a defined geographic area. Under this model, care is coordinated across the healthcare continuum by a centralized, core team of healthcare professionals. The PODs consist of up to 200 providers, depending on the area, and work with community health resources to manage a patient’s care needs.
“The goal of population health management is to expand care beyond a patient’s immediate needs and treat the whole patient — not just whatever brought them in today,” Armato said. “We want to help our patients get healthy for a lifetime and ensure they receive the right care, at the right place, at the right